Spain Among Top Improvers In World Bank's Doing Business 2016

by Mike Godfrey, Tax-News.com, Washington

30 October 2015

In its new Doing Business report, the World Bank singled out Spain for praise for tax system improvements implemented to make doing business easier in the nation.

Spain was among the economies that made the greatest advances in tax payment systems in 2014/15, the World Bank said. Spain implemented a comprehensive tax reform program in 2014 aimed at supporting entrepreneurs and encouraging investment. The objective was both to streamline and simplify tax compliance and to reduce the effective tax burden on businesses.

In the same year, Spain launched Cl@ve, an integrated online platform for the entire public administrative sector. The new system made accessing electronic services provided by public agencies substantially easier. Among other things, the new system introduced a new way of submitting tax returns online and retrieving historical data electronically. It also provides individualized information on tax procedures.

In addition, in 2014 Spain simplified compliance with value-added tax (VAT) obligations by introducing a single electronic form within the Cl@ve system. The new system also enables taxpayers to retrieve previous years' VAT forms electronically and use them to automatically populate some of the fields in the current year's forms. In addition, Spain extended and promoted the use of electronic invoicing, which began in January 2013, though the majority of companies started using electronic invoices only in fiscal 2014. Altogether, these initiatives have made it easier to comply with VAT obligations and file VAT returns, the World Bank said.

A total of 17 other economies enhanced their systems for filing and paying taxes online during the same period, namely: Costa Rica; Cyprus; Indonesia; Jamaica; Malaysia; Montenegro; Morocco; Mozambique; Peru; Poland; Rwanda; Serbia; the Slovak Republic; Tajikistan; Uruguay; Vietnam; and Zambia. Taxpayers in these economies now file tax returns electronically, spending less time to prepare, file, and pay taxes. Beyond saving businesses time, electronic filing also helps prevent human errors in returns, the World Bank said.

Tunisia and Spain were praised for lowering their taxes on profits. The World Bank noted that Tunisia reduced the corporate income tax rate from 30 percent to 25 percent for the same year, while Spain reduced the corporate income tax rate for companies incorporated after January 1, 2013, from the standard rate of 30 percent to 15 percent for the first EUR300,000 (USD330,000) and 20 percent thereafter.

Meanwhile, Mexico was praised for abolishing the business flat tax on January 1, 2014, and Serbia for abolishing the urban land usage fee starting January 1, 2014.

In the area of value-added tax, the Gambia improved its bookkeeping system for VAT accounts to better track the requisite input and output records for filing VAT returns. Vietnam reduced the number of VAT filings for companies with an annual turnover of VND50bn (about USD2.3m) or less from monthly to quarterly. Serbia introduced an online system for filing and paying VAT and social security contributions in 2014. Rwanda eliminated the need for new companies to open a bank account in order to register for VAT.

Across all the indicators measured by the Doing Business report, Costa Rica, Uganda, Kenya, Cyprus, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal, and Benin were said to have made the most substantial reforms to ease doing business. Together, these 10 top improvers implemented 39 regulatory reforms. Sub-Saharan Africa alone accounted for about 30 percent of regulatory reforms that were implemented in 2014/15 to make it easier to do business, followed closely by Europe and Central Asia.

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